Standard Chartered, an investment bank, has revised its expectations regarding the approval of exchange-traded funds (ETFs) for Ethereum's ether (ETH) by U.S. regulators, indicating that approval in May is now unlikely. This comes as a shift from its previous anticipation of the Securities and Exchange Commission (SEC) granting approval during this period.

While ETF approval for spot bitcoin (BTC) in January contributed to a surge in the cryptocurrency market, Standard Chartered remains optimistic despite altering its stance on the prospects for an ether ETF. Despite recent negative developments in the digital assets space, the bank believes that the worst is over and the market is primed for recovery, as outlined in a research report released on Tuesday.

According to analyst Geoff Kendrick, inflows into Bitcoin ETFs have stagnated, and the anticipated approval of ether ETFs in May is now uncertain. Previously, Kendrick had projected the likelihood of ether spot ETF approval by May 23, as indicated in a March 18 report.

Various factors have contributed to the challenging environment for digital assets, including the SEC's legal actions targeting decentralized finance (DeFi) platforms like Uniswap, alongside heightened geopolitical tensions and rising U.S. Treasury yields. Despite these headwinds, Standard Chartered suggests that both bitcoin and ether have absorbed the negative news and are poised for a rebound.

The bank emphasizes that the current market conditions have already priced in the negative developments for bitcoin and ether. Moreover, it anticipates that "positive structural drivers" will once again become prominent. Standard Chartered reiterates its year-end price targets of $150,000 for bitcoin and $8,000 for ether.

Market dynamics have seen significant changes, with approximately $261 million in leveraged long positions being liquidated from the bitcoin futures market on April 13, triggered by geopolitical tensions between Iran and Israel. This marked the largest daily liquidation since October 2023.

The report also notes that inflows into Bitcoin spot ETFs have likely slowed due to macroeconomic factors such as higher U.S. Treasury yields and geopolitical uncertainties. Additionally, the initial wave of ETF purchases may have subsided, with the next wave expected to come from their inclusion in broader macro funds, albeit over a longer timeframe.